Another news article regarding still yet declining home prices. This is good news for investors as it allows us to make even better deals on properties.
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Tuesday, January 31, 2012
Housing Crisis to End in 2012 as Banks Loosen Credit Standards
By: Krista Franks
01/24/2012
Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.
The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.
Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.
However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.
Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.
Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”
In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.
While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.
Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generation actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.
The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.
Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.
However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.
Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.
Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”
In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.
While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.
Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generation actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.
Friday, January 27, 2012
Foreclosures keep pushing house prices lower
"During the housing boom years of 2005 and 2006, less than 5 percent of all home sales were foreclosure-related. In the third quarter, the share reached 20 percent, down from 22 percent in the second quarter and 30 percent in the third quarter of 2010."
Georgia has a foreclosure rate of 34%, one of the highest in the country. Read the article. It gives great insight as to what is going on in the market right now.
Saturday, January 21, 2012
Existing Home Sales
Well, I hope this is not wishful thinking on the part of the economists. I have heard the same prediction in the beginning of 2011 and that took us nowhere fast.
Yesterday morning on CNBC it was announced that the inventory of existing homes fell to about a six months inventory which is extremely encouraging. The goal is to have an inventory of about a four months supply. If home sales continue at the pace they are going, we might actually see increase in home prices by the second quarter of 2012.
I do want to add that the majority of home sales reported on CNBC was attributed to investor buying. Also, over 80 percent of regular home sales fell through due to mortgage difficulties. Banks are still not giving mortgages to people on a regular basis.
Hope you find this article interesting.
Existing Home Sales
Yesterday morning on CNBC it was announced that the inventory of existing homes fell to about a six months inventory which is extremely encouraging. The goal is to have an inventory of about a four months supply. If home sales continue at the pace they are going, we might actually see increase in home prices by the second quarter of 2012.
I do want to add that the majority of home sales reported on CNBC was attributed to investor buying. Also, over 80 percent of regular home sales fell through due to mortgage difficulties. Banks are still not giving mortgages to people on a regular basis.
Hope you find this article interesting.
Existing Home Sales
Wednesday, January 18, 2012
'Uncertainty and danger': World Bank warns of downturn worse than 2008
OMG, not any more bad news. It's an opinion though.
Tuesday, January 17, 2012
Economy struggling but growing, Atlanta Fed chief says | ajc.com
It's been a while since I got excited about the Atlanta economic prognosis, however, if we are to believe the Atlanta Fed Chief, we might be finally seeing a slow improvement.
Fannie Mae sees 2012 home sales up 3.5% to 4.74 million
Well, this article gives me hope that 2012 will be a better year for home sales.
Fannie Mae sees 2012 home sales up 3.5% to 4.74 million
Fannie Mae sees 2012 home sales up 3.5% to 4.74 million
Sunday, January 15, 2012
What’s the Best Day of the Week to List a House for Sale?
Have some "flip"properties you are thinking of selling? Have you thought on which day of the week you want to get them listed? Read the article below for some interesting insight into what works best, when and most importantly...why.
What’s the Best Day of the Week to List a House for Sale?
What’s the Best Day of the Week to List a House for Sale?
Saturday, January 14, 2012
Lowest Inventory in Six Years
Should be good news to hear that we are at the lowest point in national housing inventory. It makes me feel more comfortable knowing that the construction of new homes is soon to be rebounding.
Read the article below, it should make you feel a great deal more confident about building your new home now.
Lowest Inventory in Six Years
Read the article below, it should make you feel a great deal more confident about building your new home now.
Lowest Inventory in Six Years
Tuesday, January 10, 2012
Tuesday, January 3, 2012
Housing sales up in December
Housing sales up in December: Residential home sales crept up slightly during the final month of 2011. Greater Rome Board of Realtors President Jason Free reported Monday that local agents closed 59 deals in December, up from 5...
Home prices may be more stable than we think
Posted on December 11th, 2011 by Carlo Capomazza
We
all know they story of "Peter and the Wolf" or the boy who cried
wolf—if one hears something over and again, despite how urgent it might
be, it loses its impact the more you hear it.This is the situation with the mortgage & real estate markets lately. As money changes hands more transactions are likely to occur. How many different times has the media reported that mortgage rates reached new lows? How many times have you heard that home prices have finally hit bottom?
After a while, it’s easy to lose sight of how significant certain movements of these two indicators actually are. One analyst has come out and said exactly that. When it comes to home prices, people aren’t paying enough attention to their recent improvements, said Barclays analyst Stephen Kim.
Non-distressed home prices improving
“In the absence of a government homebuyer incentive, prices for non-distressed home sales have stabilized for almost a year!” said Kim in a recent note to investors. “In our opinion, this is the most important trend in the housing industry right now, and we are amazed at how little attention it has been getting from the media and the Street. Meanwhile, we point out that this stability on the part of non-distressed prices has occurred despite a very high share of distressed activity and continued declines in overall prices.”Kim’s point is this: Sure, distressed properties weighed down overall measures of home prices, but when you examine non-distressed prices on their own, the data reveals that we may have hit bottom and things may be well on their way to improving, especially as we move into next year.
At least this another indication that things are moving in the right direction.
Related articles
- Home prices fall in Seattle and most major U.S. cities in September (seattletimes.nwsource.com)
- Fewer Foreclosures, But No Relief for the Housing Market (usnews.com)
- Home Prices Rise 3.0% in Atlanta (hapevilleaerotropolis.wordpress.com)
- CORELOGIC: House Prices Won't Go Anywhere Through 2013 (businessinsider.com)
Big Money is Starting to Wager on Housing.
BY GREGORY ZUCKERMAN
Wall Street Journal, December 29, 2011
Hedge funds run by Caxton Associates LP, SAC Capital Advisors LP, Avenue Capital and Blackstone Group LP have been buying housing-related investments, betting on a rebound. And formerly bearish research firm Zelman & Associates now predicts a housing pickup, as does Goldman Sachs Group Inc.
Other investors seem to be making the same bet. Shares of home builders are up 30% since the end of the third quarter, as measured by the Dow Jones index tracking those shares, topping a nearly 10.5% gain for the Standard & Poor’s 500. Home builders haven’t outperformed the broader market by this much in a quarter since the third quarter of 2008.
“We turned bullish on housing. A rebound is coming,” says Andrew Law, chief investment officer at $10 billion hedge-fund firm Claxton. He expects that home prices and construction will rise in 2012.
“The housing-price bottom is probably in sight,” Goldman Sachs said in a December 15 report. Housing prices might decline by 3% next year before beginning a rise, Goldman says. The bank predicts gains of 30% over the following 10 years, not taking inflation into account.
FHA Says: Flip That House
By Les Christie @CNNMoney
January 2, 2012
NEW YORK (CNNMoney) — Flippers, the real estate investors who buy homes on the cheap and quickly resell them at a profit, just got a reprieve from the Federal Housing Administration.
In an effort to help stabilize housing prices and unload some of the foreclosures that are flooding low-income communities, the mortgage insurer extended a waiver of its anti-flipping regulations through 2012.
The waiver, which was initially issued in 2010 and set to expire this month, suspends regulations that prohibit the agency from insuring mortgages used to purchase homes that are bought and resold in less than 90 days.
“This extension is intended to accelerate the resale of foreclosed properties in neighborhoods struggling to overcome the possible effects of abandonment and blight,” said Acting Federal Housing Administration Commissioner Carol Galante.
Low-income neighborhoods are particularly plagued by foreclosed homes that lower property values and act as magnets for crime and other social ills. Real estate flippers often rehab these damaged homes before reselling them, improving conditions for neighborhoods.
The ban against flipping was initially put in place to prevent predatory flipping, in which homes are quickly resold at inflated prices to unsuspecting borrowers.
In order to qualify for the waiver, certain conditions must be met. The transaction must be “arms length” with no other relationship between seller and buyer.
In addition, if the new sale price is 20% or more above the previous selling price, the lender has to document and justify the increase and meet other conditions, such as making sure the home has been inspected.
Since the waiver went into effect in February of 2010, the FHA has insured more than 42,000 loans to purchase homes that were being resold within 90 days. These totaled more than $7 billion in mortgage principal.
Monday, January 2, 2012
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